Friday, November 20, 2015

I've pointed out before that science and technology is advancing by leaps and bounds, and that the U.S. leads the world in them. Our problem is our screwed-up government. It needs to be about one-fifth of the size it is now. I'd settle for that.

And when the 41-year-old geopolitical analyst from Austin studies the U.S. map, he sees the world’s economic powerhouse for the next several decades, perhaps much longer.

Why?

The U.S. has the world’s most extensive navigable river system, most productive agricultural land, an “ocean moat” that provides defensible trade access to the world and economic allies on its borders, says the author of The Accidental Superpower, published last year.

Factor in the size of the U.S. Navy, and you’ll realize America is the only country with total global military reach and the capacity to shut down essential shipping channels if threatened.

“You can look at a map of any country, its topography, look at the climate, study a bit about the culture, history and the military system, and understand what they’re worried about,” Zeihan says in a recent interview.

He uses this unusual set of forecasting tools to help the business world figure out how to home in on opportunities and avoid global disasters. And there’s no place like home, he says.

Other pistons in the U.S. engine:

Demography. Other countries face much sharper economic decline as their populations age by an average of 25 percent faster than ours. “We are the only developed country that has a population cohort of Gen Y [currently ages 11 to 33] who will provide economic growth for the next 30 years,” he says. “Since 1974, the Canadians, the Japanese, the Germans, the Chinese stopped having kids. There’s been this 30-year baby bust in the rest of the world. So all the growth is going to be here.”

Shale oil. By the end of next year, North America will be at net-zero oil imports. The break-even cost of production will be about $35 a barrel.

“You’re looking at the United States being cost competitive with every energy producer in the world outside of the Persian Gulf at the same time as it hits energy independence,” Zeihan says.

Isolation

All of this is coming together as the United States shifts into an isolationist mode that will probably leave out China, Japan, South Korea and Europe (with the exception of the U.K.) as favored trading partners.

The U.S. no longer needs a trading alliance it established after World War II to contain the Soviet Union, and there’s growing resentment that some of our allies are feasting on our goodwill.

“Russia really gets screwed in this future,” he says, because it was never a comrade in trade.

“To be perfectly blunt, Americans are tired of the rest of the world,” Zeihan says. “The question is whether this retrenchment lasts for five years or 60. The conscious decision of countries like Germany and China to maximize exports and take advantage of the environment that the U.S. created isn’t winning free trade many fans here.”

It’s a concern that Hillary Clinton and Donald Trump can share, even if they disagree on remedies.

“Seven percent of our GDP is from exports, and most of that is from NAFTA,” Zeihan says. “The rest is from a short list of countries that we’re probably going to keep in the allied network. Instead of 150-plus countries, the network is going to be more like a couple dozen. If you’re in that group, party on. If you’re not, it’s going to be horrible.”

Zeihan worked for Stratfor Global Intelligence, a well-regarded geopolitical company in Austin, for 12 years before going out on his own with his company, Zeihan on Geopolitics LLC, three years ago. He was in town late last month to give the keynote speech at the Commerce Street Conference at the George W. Bush Presidential Center.

Wait, what?

Zeihan is articulate, edgy, highly informed and oddly entertaining about topics that are anything but amusing. At times, I’d think, “Whoa! Is he serious?” — such as when he predicted that China, Japan and Russia might cease to exist in their current forms — before I’d conclude that he might be onto something.

For example:

“The Russian population collapse is one of the most severe in the world. Five years from now, the Russians will not have sufficient demographic capacity to man the Red Army. It’ll be less than half the size that it is today. So if the Russians are going to use military strategy to assure brighter days, Putin knows they have to do it now. And so he is by expanding west.”

Or how about:

“There is a lot of noise breaking out of the international system about Saudi Arabia, Syria, Iran, Russia, the Ukraine and China. There’s this perception that things are falling apart. And they are. It’s not myth. Things really are falling apart. But international instability doesn’t hurt the United States anymore. In fact, if you want to be really cold about it, it actually helps.”

Then there was:

“Anyone who’s dumb enough to poke us, they’re screwed. The United States still has the military capacity to interfere with international trade anytime it wants to. The U.S. Navy is 10 times as powerful as all of the world’s other navies put together. Any country that decides to mess with the United States for any reason faces an entity that has the ability to shut down the world and not care what happens the next day.”

Provocative sells. Zeihan has become a speaking-circuit star, typically charging $15,000 for a keynote speech. Lately, he’s been booked for several each week.

He adapts his conclusions to the industry he’s talking to, but his central takeaway is the same:

9 comments:

Growing federal debt, a large part of demographic growth coming from single parent families, FIRE economy whose contribution largely consists of shuffling paper or bits of data, clumsy if not outright inept foreign politics, horrid educational system, growing welfare state. Have I missed anything important? Oh, and Europe won't be the only place that the future African surplus will be trying to migrate to.

Incorrect, Bob. There is no feed-back which is why the wheels are falling off - it can't correct.

It is my scholarly contention that it is an exponential system whereby 1+1=2 may not apply - it may be that 1+1=6; and 1+2=18 etc. Consider:

America gives women the vote. 10 years later America has an income tax and an infant welfare state.

20~30 years later, low IQ/low skill blacks are getting preferential treatment in the workplace, in politics and in the welfare line. Women are destroying families and corporations with feminism.

40~50 years later America is being run by a black baboon that's never had to work a day in his life; third generation hippies are gutting the colleges and universities, and the gates are thrown wide open to moslem and Mexican sewage to come in and loot America's finances. Pretty much everyone except the vibrants and the leftists know the wheels are coming off - its only a matter of when.

Each little cock up - when added to another relatively small one - combine to produce a massive f-up and some are so big now that only world wars and mass starvation will correct them.

The good news is that with any luck and preparation we will see those responsible die first. After the useful idiots are all dead - things will get interesting for the rest of us.

I was surprised at the claim that Russia's military would be so severely affected by demographics in so short a time, but it's true. I looked it up, and the 15-19 age cohort is half the size of the 25-29 cohort, with the 20-24 cohort about half way between. There is a serious shortage of young men on Russia's horizon.

Two similar analagies: - you don't have to be the best there has ever been, only a little better than everyone else right now- democracy is the worst form of government, except for all the others.Long story short, you don't have to thrive when everything fails, only survive and you'll already be ahead of most.China has both a massive demographics problem and an even bigger credit problem. So much for being the world's money supply!

The only potential downfall the US could have (very very very small chance) is civil war.

The only potential rival is a German Russian alliance and the US has already seen to that with a military presence from the Baltics to the Balkans. If the Germans think twice they'll get another several million 'refugees'.